LDESP PACOM News Update: August 2012

LDESP USPACOM NEWS UPDATE: 17 August 2012

This edition’s featured topic: a debate on China’s military and U.S. Strategy. See the blog post here to be part of the discussion.

The PACOM update includes news coverage from Pakistan to the Pacific Islands. As with all LDESP news briefs, the information contained within the PACOM update is to increase situational awareness. The PACOM update focuses on issues concerning South Asia, South East Asia, North East Asia, China, Australia, and the Pacific Islands, including articles central to transpacific security and stability, as well as political and economic issues that may impact the region and U.S national interests in the region.

Disclaimer: Articles are taken from established and diverse professional periodicals, news articles, and editorial commentaries from different countries, reflecting a range of political views/biases, that are intended to provide readers with a better understanding of various interests and perspectives regarding the situation in the region. External links may expire at any time depending on the archiving policy of the particular news agency. News summaries may highlight only a portion of an article that is relevant to the readers and may not necessarily be the focus of the entire article or the headline. Opinions expressed in the articles, commentaries, and featured topics do not constitute endorsement by the Department of Defense, the US Navy, or the LDESP staff.

Gu Kailai, the wife of deposed Chinese leader Bo Xilai and a career lawyer, faces possible execution for murder at the hands of a swift, unblinking justice system that she once championed. Gu, who practised commercial law and wrote once a book about her experiences of both the Chinese and U.S. legal systems, will be at the centre of highly politicised trial this month in which rule of law is unlikely to attract more than token attention. (…) Now Gu finds herself on the other side of Chinese law in a case that experts say is unlikely even to become a rallying point for China’s marginalised supporters of judicial reform. “It simply cuts too close to core issues of internal (Communist) Party politics and the handover of power,” said Carl Minzner, a Chinese law expert at New York’s Fordham University School of Law, casting Gu’s trial as part of a political campaign against her husband, once seen as a candidate to join China’s next top leadership team to be unveiled late this year. “These are the very last areas we should expect any willingness (from Beijing) to play by legal norms.” China has long had an official agenda of enforcing rule of law and its case against Gu has drawn global interest, not only because of the political overtones but because the victim, former Bo family friend Neil Heywood, is British and Frenchman Patrick Devillers is a potential witness. (…) They [Experts] point out that the signs so far are that the trial against Gu and her alleged accomplice, family aide Zhang Xiaojun, will be a formality with only the severity of the sentence in any doubt – execution or a long jail term. (Money Control)

Chinese authorities in Beijing are coming under continuing criticism for allegedly downplaying the severity of deadly floods that have killed scores of people since last July 20th. Skepticism.Internet users reacted with skepticism to the official death toll, and called it a man-made disaster that has highlighted the government’s poor emergency response. Pan Anjun, deputy head of the municipal flood control and drought relief headquarters appeared at a news conference on the evening of 26 July saying that 77 dead bodies had been counted so far. (…) Online, where news of the floods trended high on microblog searches since the 21 July and witnesses posted pictures and videos to detail the damages, the government’s management of the rains was the subject of much criticism. “The death toll should have been zero,” one user says noting that though the government cannot control nature, it is still possible to warn people in advance, use some precautions, provide emergency relief and deal with the aftermath properly. (…) The biggest rainstorm in 61 years hit China’s capital on 21 July, overwhelming the city’s drainage system, flooding highways and, in rural areas around the capital, triggering mudslides and river overflows. (…) The floods’ damage, estimated at nearly $2 billion, is a huge embarrassment for China’s leaders, whose effort to upgrade the country’s image culminated in the 2008 Beijing Olympics. Many commentators pointed at the discrepancy between what city officials wanted to show the world then, and the reality made clear by the downpour. (Voice of America)

The cancellation on Jul of a second Chinese industrial project in a month following fierce environmental protests demonstrates the government’s growing sensitivity to China’s pollution problems. Officials in the coastal community of Qidong in the eastern Chinese province of Jiangsu said on 28 July that they would stop construction of a pipeline intended to dump wastewater from a Japanese-owned paper mill into the sea. Worries about pollution sparked protests early on 28 July that the state-run Xinhua news agency said drew thousands. (…) Locals worried that the water would pollute the nearby Yangtze River or the nearby sea, which is a prime fishing area. Oji Paper said in a statement that reports that there are carcinogenic substances in the water are totally “groundless.” The company also said that its purification treatment clears China’s national standards and that the company handles water treatment with a sense of responsibility. (…) In a nod to those growing concerns, Chinese central government officials have embarked on a number of measures to reduce China’s dependence on fossil fuels and to tighten environmental regulations. Still, officials also appear to worry about the prospects of such protests spreading. The term “Qidong” appeared to be blocked on 28 July in China’s popular Twitter-like Sina Weibo microblogging service, which serves as the closest thing to a national forum on domestic issues in a country that keeps a tight rein on political discourse. (Wall Street Journal)

Chinese President Hu Jintao is maneuvering to promote one of his closest allies to the Communist Party’s inner sanctum, two independent sources said, in a bid to retain clout and preserve his legacy after retiring as party chief. Hu Chunhua, party boss of the northern region of Inner Mongolia, is a rising political star of the party’s next generation of senior leaders. He is seen as a reformer and a close ally of Hu Jintao, although the two are not related.Under the constitution, the president, 69, has to stand down early next year in a once-in-a-decade leadership transition.”Hu Jintao regards Hu Chunhua highly and is determined to promote him,” a source with ties to the leadership said. (…) “After leaving the (political) stage, the retiring leader hopes that the show will go on,” added the analyst, who asked not to be identified, citing the sensitivity of discussing elite politics. It will also help ensure there is no political retribution carried out against Hu Jintao or his family by other factions who will remain in power once he is gone, the analyst said. (…) A new leadership line-up, including the new standing committee, is expected to be announced at a party congress, to be held in October at the earliest. The new lineup will formally take over the reins of power in March. (Reuters)

Will China’s cooling service economy follow the flagging manufacturing sector and further drag on a slowing economy? That’s what an official index released 3 August suggests could happen, even as China grew just 7.6 percent in the second quarter, its slowest pace in three years. The official non-manufacturing index, based on a survey of about 1,200 companies in 27 industries including telecommunications, transportation, and construction, slipped to 55.6 from 56.7 in July, the National Bureau of Statistics and the China Federation of Logistics and Purchasing announced on 3 August. A separate, privately run index, released by HSBC (HBC)and Markit Economics, showed a slight improvement, with its reading edging up from 52.3 to 53.1 in July. Readings above 50 indicate expansion. Service industries now make up about 43 percent of China’s economy, compared with 90 percent in the U.S. Beijing hopes to grow the service contribution to 47 percent by 2015. (…) On 1 August, the purchasing managers index, also released by the logistics and purchasing federation and China’s statistics bureau, dropped to 50.1, its lowest level in eight months. Exporters are being hit by the still dismal state of the global economy, while manufacturers also face flagging demand as growth slows at home. (…) “Local governments across China have unveiled a series of stimulus plans, echoing the recent message from top authorities of the need to ensure strong growth. More stimulus plans are likely to follow soon,” say economists Qinwei Wang and Gareth Leather, both in London with Capital Economics. Still, the measures are likely to have limited impact, given the several years’ duration for their completion. (Bloomberg Businessweek)

Chinese data dealt policymakers fresh blows on 10 August as trade and new bank lending suggested pro-growth policies have been slow to gain traction and more urgent action may be needed to stabilize the economy. Figures on 10 August showing July exports rose just 1 percent from a year ago and that new loans were at a 10-month low added to data on 9 August showing factory output rising at its lowest pace in three years and pricing power fading. The first hard data of the third quarter has led some analysts to question the strength of what was expected to be the start of a shallow rebound in the economy after growth had slipped for six successive quarters. (…) Some economists say the central bank could move as early as 12 August to ease policy. It has reduced banks’ required reserve ratio (RRR) in three steps since November to free up an estimated 1.2 trillion yuan ($190 billion) for new lending and cut interest rates in June and July. Ahead of the data, China Vice Commerce Minister Gao Hucheng had told reporters it would be a challenge for China to meet its 10 percent trade growth target in the second half of the year. The minister, Chen Deming, had said in June that China would be “lucky” to achieve the target. (…) “This complicates the prospects for an imminent recovery. With the export sector losing speed faster than expected, the government’s current investment stimulus plan looks woefully inadequate,” Thornton wrote. (Reuters)

Soaring numbers of Chinese tourists packed onto flights out of the country is a sure sign that the members of a fast-growing consumer class of about 130 million are not worried that what will probably be the slowest year of economic growth since 1999 will sap their spending power. Nearly 39 million mainlanders left China on overseas trips in the first half of 2012, about double the number five years ago and evidence that a powerful consumer force — envisaged by the top leadership as the engine of economic expansion in a generation to come — may be bulking up faster than thought. (…) Paul French, the Shanghai-based chief China strategist at the market intelligence consulting firm Mintel, says the purest view of the domestic economy’s health always comes from the consumer. “If consumers feel good about things, they’ll spend. If they don’t feel good, they’ll stop,” he said. “Travel is a good indicator, because people are traveling more, and they are consuming a lot when they travel abroad.” (…) A shift to the domestic market, leveraging China’s population of 1.3 billion, would cushion the economy from the huge drop-offs in foreign demand that the debt crisis in Europe is causing, barely three years after the trade shock it suffered in the global financial turmoil of 2008-9. (…) Analysts at the consulting firm McKinsey say affluence is arriving faster than many economists anticipated, forecasting a giant leap by 2020 based on annual surveys it has carried out since 2005. (NYT, Reuters)

China’s government said on 30 July it would make investments in key projects in a bid to encourage private sector finance to play a greater role in developing vital industry sectors including railways, utilities, finance and healthcare. The announcement, made after a regular cabinet meeting, follows rules issued by China’s top economic planning agency – the National Development and Reform Commission (NDRC) – to open up strategic industries presently dominated by state-owned companies to the private sector. “The cabinet meeting urged various regions and government departments to take candid and effective measures to implement policies to create an environment that is fair, transparent and predictable to all market players including the private ones,” the central government said in a statement on its website, http://www.gov.cn. China must “launch some key projects, as soon as possible, to allow private investment in railways, public utilities, energy, telecommunications, financial, health and education industries, in order to set up examples,” the State Council said, after a meeting chaired by Premier Wen Jiabao. (…) The push to open state controlled industries leaves some analysts skeptical and anticipating resistance from state-backed giants which enjoy preferential access to finance and government contracts.(…) To bolster growth, China has been “fine-tuning” policies since autumn and accelerated the pace recently, cutting interest rates twice in June and early July, fast-tracking investment projects and encouraging energy-efficient consumer spending. (Reuters)

A Chinese industry group slammed a U.S. decision to impose preliminary antidumping tariffs on Chinese exports of wind-turbine towers, saying 30 July that the move was disappointing and would backfire against the U.S. industry. The U.S. decision is the latest move in a trade row that has pitted the U.S. and the European Union against China in two of the largest clean-energy sectors: wind and solar. It comes at a time when companies in the U.S., EU and China are reeling from oversupply, sliding prices and weak demand.(…) The chamber, representing Chinese makers of wind-turbine towers, will continue talks with officials at the U.S. International Trade Commission and U.S. Commerce Department in an effort to persuade them to overturn the preliminary decision before a final decision is made toward the end of the year, she said. “The U.S. is trying to protect their own industry amid an economic downturn, without considering the development of the whole industry chain,” Ms. Liu said. China’s Ministry of Commerce convened a closed-door meeting of Chinese wind-turbine-tower companies in June to discuss potential responses and countermeasures to possible U.S. antidumping tariffs. (Wall Street Journal)

The United States has issued its annual report on religious freedom around the world, taking particular aim at repression and crackdowns in China, North Korea and Myanmar. China shot back that the report was “full of prejudice, arrogance and ignorance.” “More than a billion people live under governments that systematically suppress religious freedom,” Secretary of State Hillary Rodham Clinton said in remarks summarizing the new report. (…) China issued a biting response on 31 July, saying the U.S. report continued “a notorious practice of blatantly interfering in the internal affairs of other countries, including China, in the name of religion.” A slightly condensed excerpt from the response, published as a commentary by the official news agency Xinhua: The annual report, largely based on unconfirmed media reports and groundless allegations from outlawed groups and organizations with ulterior motives, is nothing but a political tool used by the U.S. government to exert pressure on other countries, mostly deemed as its rivals. The U.S. practice of releasing such a report, which is full of prejudice, arrogance and ignorance, is unimaginative and even counterproductive. (New York Times)

China blasted the United States on 5 August for its recent public criticism and urging of diplomacy to address territorial disputes in the South China Sea, saying the U.S. statement shows “total disregard for the facts” and sends “a seriously wrong message.” The blistering statement, from Chinese foreign ministry spokesman Qin Gang, follows one issued the previous day by a counterpart at the U.S. State Department. The debate revolves around who controls islands and waters in the South China Sea. Countries such as Vietnam and the Philippines lay claim to some areas. Qin stated unequivocally on 5 August that “China has indisputable sovereignty over the South China Sea and adjacent waters.” (…) Qin, the Chinese foreign ministry spokesman, started his statement — which was posted on his ministry’s website — by accusing the United States of confounding “right and wrong” and undermining regional efforts to “uphold peace and stability in the South China Sea and the Asia-Pacific region at large.” China’s action in Sansha City, specifically, is a “necessary adjustment” that falls “well within China’s sovereign rights,” the spokesman said. (CNN)

China’s Foreign Ministry on 1 August urged the United States to rescind sanctions imposed on a Chinese bank over its transactions with Iran, saying the move damaged China-U.S. relations.Ministry spokesman Qin Gang said in a statement that China expressed its strong dissatisfaction and firm opposition and would lodge an official protest with Washington. “We ask the U.S. to correct the mistake, withdraw its sanctions against Bank of Kunlun — which is controlled by a major Chinese oil company — and stop harming Chinese interest and hurting bilateral relations,” Qin said. The White House on 31 July announced penalties against China’s Bank of Kunlun and an Iraqi bank that the Obama administration says have helped Iran evade international sanctions. Kunlun will be unable to do business with any U.S. banks. (Associated Press)

Japan will hold government-level talks with North Korea for the first time in four years, Japanese officials said on 14 August, in the latest sign of a thaw in relations between the two sides. Chief government spokesman Osamu Fujimura announced that the talks will be held in Beijing on 29 August and cover “various pending issues.” Japan ruled the Korean Peninsula as a colony before and during World War II. Ties between Japan and North Korea remain chilly, and they do not have formal diplomatic relations.(…) The Red Cross talks, reportedly the first in 10 years, “helped us to deepen our understanding of each other’s situation,” Fujimura said. He said the two governments have sought since 8 August to deepen the discussion and agreed to hold a preliminary meeting on 29 August. (…) In another sign of a thaw, Tokyo plans to issue special visas to North Korean soccer players to allow them to participate in the women’s under-20 World Cup starting on 19 August in Japan. Japan has banned trade and exchanges of people with North Korea under sanctions it imposed over the North’s nuclear and missile programs, but sports and humanitarian visits are considered exceptions. (Washington Post, Associated Press)

China says it has signed agreements stepping up economic co-operation with North Korea during a visit to Beijing by a senior Pyongyang official.The Commerce Ministry said these included the development of two special economic zones.The deals came as Chang Song-taek, uncle of North Korean leader Kim Jong-un and believed to be a key influence on him, visited China. Meanwhile, Japan says it will also hold talks with North Korea this month. (…) China’s Commerce Ministry said that a management committee to oversee two economic zones would be established with North Korea. One is in Rason, on North Korea’s east coast, and the other is in Hwanggumphyong, on the border with China.The two countries also signed agreements on agricultural co-operation and electricity supply. (BBC)

Japan will deport 14 Chinese activists who were arrested this week for landing on disputed islands in the East China Sea without authorization, officials said on 17 August, relieving some of the tension from one of the territorial disputes Tokyo has with its neighbors. The protesters had traveled by boat from Hong Kong to the uninhabited islands controlled by Japan but also claimed by China and Taiwan. They were arrested on 15 August after five of them landed on one of the five-island group, known as Senkaku in Japanese and Diaoyu in Chinese. Chief Cabinet Secretary Osamu Fujimura said on 17 August that Japan would deport the activists and not press further charges. (…) The arrests prompted protests in Hong Kong and Beijing. Japan’s move to quickly deport the activists was seen as an attempt to keep the incident from further inflaming protests. Japan says it has controlled the five main islands for more than 100 years. It has been trying to place four that are privately held under state ownership to bolster its territorial claim. (…) While the deportations will relieve some tension between Tokyo and Beijing, Japan moved to act tougher on another island dispute, this one with South Korea. Japan threatened on 17 August to cancel upcoming ministerial talks to protest recent remarks and actions by South Korean President Lee Myung-bak that stirred animosity, and said it wants to take the island dispute to the International Court of Justice. (ABC News, Associated Press)

The 15 August 67th anniversary of the end of World War II collided with election-year politics in the Asia Pacific, spurring South Korea’s president, Japanese officials and Chinese activists to stage controversial gestures that have stirred up bitter wartime memories. South Korea had already rekindled long-smoldering resentment of Japanese occupation and war-era abuses when its president, Lee Myung Bak, last 10 August visited a cluster of rocky islets claimed by both his nation and Japan. Japanese Prime Minister Yoshihiko Noda recalled his nation’s ambassador to South Korea in protest of Lee’s visit 10 August to the outcroppings known in Japan as Takeshima and in South Korea as Dokdo and coveted for their surrounding fisheries and energy reserves. On 15 August, the anniversary of Japan’s surrender that ended World War II and its colonial occupations, Japanese coast guards arrested 14 Hong Kong activists who landed at another set of disputed islands to stake a claim for Chinese sovereignty. The report by Japan’s NHK World network on the incident said the fishing boat bore a banner proclaiming that “China cannot give up an inch of its territory.” (…) Political posturing is seen behind the controversial gestures, given that major leadership challenges lie ahead this year in all three countries. China’s Communist Party is expected to carry out a once-in-a-decade shakeup of its hierarchy this fall, Noda faces his Democratic Party of Japan’s leadership election next month and a presidential vote is set for December in South Korea. (Los Angeles Times)

North Korea said it is reviewing the “nuclear issue” to counter the U.S., days after Kim Jong Un consolidated his power by taking the nation’s top military rank and removing the army chief. The U.S. is funding plots to bring down the regime in Pyongyang, an unidentified Foreign Ministry spokesman said in a statement carried by the official Korean Central News Agency on 19 July. The dispatch didn’t elaborate on what was meant by the nuclear review. Kim may be preparing to follow in the footsteps of his father, Kim Jong Il, who detonated nuclear devices in 2006 and 2009, according to South Korea’s Foreign Ministry.(…) The statement shows that North Korea may change its mind and conduct a third nuclear test, said a South Korean Foreign Ministry official involved in nuclear talks, who asked not to be identified because he isn’t authorized to speak to the media. He said there was no substance to North Korea’s accusation and urged it to return to six-nation talks aimed at ending its nuclear weapons program.(…) The North Korean regime disclosed a uranium enrichment plant in November 2010, providing it with a second means in addition to plutonium to create nuclear weapons. South Korea raised some military alert levels late July after Kim assumed the title of marshal and Ri Yong Ho was fired as army chief. (Bloomberg)

North Korea’s young leader promoted a new army marshal after sacking his top general in what a South Korean official report said was a bid to impose authority on a military that has been the backbone of his family’s long rule over the isolated state. But analysts said the moves, just seven months since rising to power, do not suggest any fundamental change by Kim Jong-un to the policies of his grandfather and father which have left North Korea constantly on the brink of famine and ostracized by the most of the world.(…) “The purging of Ri could be a message towards the new military, as it remains a threat to the Kim Jong-un regime, although it served an important purpose in helping Kim to the throne,” said the report on Ri’s ousting. (…) One of the main beneficiaries of Vice Marshal Ri’s ousting looks to be Jang Song-thaek, the young Kim’s uncle who married into the ruling family and who is reckoned by many analysts as the real power behind the throne.(…) “Previously there were two pillars in North Korea’s regime — the elite guardians’ group led by Jang Song-thaek and Choe Ryong-hae and military elites’ group led by Ri,” said Lee Seung-yeol, researcher at Ewha Institute of Unification Studies. “Now that Ri, whom Kim Jong-il wanted to face against Jang, was removed, the elite system built by Kim Jong-il has completely broken apart,” he said. (Reuters)

North Korea on 6 August hit out at the United States and South Korea over their planned joint military drill this month which it said was “an all-out war rehearsal” that could ignite conflict on the Korean Peninsula. The allies will hold Ulchi Freedom Guardian, which is largely a computer-simulated exercise, on 20-31 August to improve their combat-readiness amid high cross-border tensions.The US and South Korea “are going to stage again Ulchi Freedom Guardian joint military exercises for invading the DPRK from 20-31 August at a time when they are becoming evermore undisguised in their hostile policy and confrontation racket against it,” the North’s Korean Central News Agency said.(…) The allies describe their annual exercises as defensive and routine but the North habitually terms them a rehearsal for invasion and launches its own counter-exercises. (…) The Rodong Sinmun, the mouthpiece of the ruling Workers’ Party, also said the exercise demonstrated Washington’s hostile attitude. “This is a vivid expression of its hostile policy toward the (North) and a dangerous act to ignite a new war on the Korean Peninsula at any cost,” said the commentary carried by KCNA, quoted by South Korea’s Yonhap news agency. “The joint military exercises are an all-out war rehearsal against the (North) from the viewpoint of military hardware and scale of forces to be involved in them and their program and nature,” it said. (Channel News Asia)

The North Korean leader Kim Jong-un has begun stripping his country’s powerful military of its lucrative export rights in a bold attempt intended to both rejuvenate its staggering economy and curtail top generals’ influence, according to a Seoul-based Web site run by defectors from North Korea.Although it is impossible to confirm most information about isolated North Korea, there have been hints that Mr. Kim might be unhappy with the stewardship of parts of the economy. In a speech distributed by the state news media in April, he said he intended to keep a tighter control on minerals exports, some of which analysts believe are controlled by the military.“Some people are now attempting to recklessly exploit the country’s valuable underground resources on the excuse of earning foreign currency by exporting them,” he said, without mentioning who the culprits were.(…)“The military has developed a taste for money,” the Web site quoted Mr. Kim as saying. “From now on, the party and the state will provide bullets and guns for the military, and the military should just focus on how best it can fight.” That policy, if confirmed and enforced, would represent a significant shift in the role and status of the 1.1 million-man North Korean military, whose influence expanded vastly under Mr. Kim’s father, Kim Jong-il, who died in December. (New York Times)

The young man who took the helm of North Korea following his father’s death last December has been formally declared the country’s top military leader.North Koreans had been alerted an hour in advance to tune in at noon for important news. The previous time there had been such an announcement was on 19 December last year to announce the death of leader Kim Jong Il. ​​So anticipation was high, not only in North Korea, when the announcer opened the noon newscast.The announcer said “a decision was made to award the title of Marshal of the Democratic People’s Republic of Korea to Kim Jong Un, the supreme commander of the Korean People’s Army.” The 45-second announcement was followed by state radio playing the song “We will defend General Kim Jong Un at the Risk of Our Lives.” Kim is believed to be 29 years of age.The promotion for Kim, previously named a four-star general and who already holds almost all top military and party positions, comes just days after army chief Ri Yong Ho was removed from all of his posts supposedly due to “illness.” An obscure general, Hyun Yong Chol, was named on 17 July to replace Ri as vice marshal. (Voice of America)

President Lee Myung-bak of South Korea flew to a set of islets locked in a territorial dispute with Japan on 10 August, dismissing protests from Tokyo and making a trip that was bound to heighten diplomatic tensions between Washington’s two key Asian allies.Japan called Mr. Lee’s visit “unacceptable” and recalled its ambassador from Seoul in protest, Prime Minister Yoshihiko Noda told reporters in Tokyo. (…) “Dokdo is truly our territory, and it’s worth defending with our lives,” Mr. Lee told the police officers, according to the national news agency Yonhap, whose reporter accompanied the presidential entourage.With his popularity plummeting amid corruption scandals implicating his associates, Mr. Lee is badly in need of a boost to his political leverage. Opposition politicians were quick to accuse him of making the unprecedented presidential trip to tap South Koreans’ deep-seated nationalistic sentiments against Japan for gains in domestic politics. Although Mr. Lee is banned by law from seeking re-election in the presidential vote scheduled for December, his governing party feared being labeled “pro-Japanese” so much that it forced his government in June to postpone the signing of an agreement to share classified military data with its rival.The dispute over the islets remains one of the most contentious unresolved issues from Japan’s often brutal colonial rule of the Korean Peninsula from 1910 until its World War II defeat in 1945. (New York Times)

South Korea reiterated on 31 July its demand that China investigate accusations by a South Korean activist that he was tortured by Chinese security officers, ratcheting up pressure in a case that has already caused tensions. Following the assertions of the activist, Kim Young-hwan, the Foreign Ministry also said it would interview an estimated 620 South Koreans known to have been held in China on allegations of various crimes to see if any of them were tortured. In addition, a spokesman for the ministry said the government would “actively support” Mr. Kim’s plan to take his case to the United Nations high commissioner for human rights. (…) Mr. Kim, 49, who has said he was trying to help North Korean refugees in China, was arrested with three other activists from the South on 29 March. They were held for 114 days on charges of endangering national security until they were expelled on 20 July.The case has snowballed since Mr. Kim’s release. Last end of July, he called a news conference at which he announced that he was tortured and that the Chinese authorities had tried to make him sign a statement denying any mistreatment and admitting to violating Chinese laws as a condition of his release, something he refused to do. He has since provided South Korean news media with details of his alleged torture. (New York Times)

South Korean defense officials have given a partial endorsement to a recent Pentagon-commissioned study that suggests the U.S. military take steps to cover for perceived shortcomings in the South’s ability to defend itself. Ministry of National Defense officials said they disagree with some elements of the independent assessment of the U.S. military’s plans for its Pacific forces, done by the Center for Strategic and International Studies. But one official said he would welcome the additional U.S. military support that has been proposed. The report recommends that the U.S. should: – Expand the presence of Marines in joint exercises with the South’s military, particularly in the Yellow Sea where 50 South Koreans were killed in North Korean attacks on the Cheonan warship and Yeonpyeong Island in 2010.- Consider deploying two Littoral Combat Ships to Chinhae Naval Base in South Korea.- Delay the planned 2015 transfer of wartime operational control of allied forces to the South until the South Korean military is better prepared to assume the additional responsibilities. (…) A South Korean defense ministry official, who spoke on condition of anonymity, said an increase in the U.S. Marine presence “will certainly be effective in preventing North Korean provocations on the (Yellow Sea) islands.” “I believe this recommendation shows…they listened to us,” he said. (Stars and Stripes)

Japan’s economy expanded just 0.3 percent in April-June, half the pace expected, raising doubts about the strength of the recovery as a rebound in consumer spending loses momentum and Europe’s debt crisis weighs on worldwide demand. The cabinet figures on 13 August provide fresh evidence of a global slowdown as growth in the United States, Europe and China flounders, raising expectations in financial markets that policymakers will take action to lift the world economy. Economists had expected Japan’s growth to pull back to 0.6 percent after a strong expansion of 1.3 percent in the first quarter when government subsidies on low-emission cars drove private consumption up at its fastest pace in three years.But private consumption was weaker than expected and exports, traditionally the driver of Japan’s economic growth, shaved 0.1 percentage point off of the quarter’s gross domestic product. (…) But global headwinds and the yen’s strength are raising increasing worries among policymakers and companies about the prospects for already weakening exports.(…) Despite the slowdown, April-June growth of 0.3 percent is close to Japan’s average quarterly growth over the last decade of 0.24 percent, suggesting a pull back to its long-term trend. Indeed, Economics Minister Motohisa Furukawa said Japan’s economy was growing at a healthy pace. The slowdown was largely a reaction to unusually strong growth in the previous quarter, he said.”Japan’s economy continues in an uptrend led by domestic demand,” Furukawa told a news conference, although he added that the government would consider a supplementary budget to support the economy “if necessary”. (Reuters)

Japan is considering what do with 14 Chinese activists who were arrested after landing on a disputed island, further upsetting ties between the two Asian neighbors. The activists landed on 15 August on the island in the East China Sea, planting a Chinese flag and singing the country’s national anthem before being promptly arrested and accused of violating immigration laws. Japan, which is sending the activists to Okinawa for questioning, is reportedly considering deportation as a way to defuse the feud with Beijing, which has lodged a formal complaint and demanded their unconditional release. The uninhabited islands, known as Senkaku in Japanese and Diaoyo in Chinese, are a frequent flashpoint between Tokyo and Beijing. They are located in a gas-rich area and surrounded by rich fishing grounds. (Voice of America)

Tens of thousands of people protested against nuclear power outside Japan’s parliament on 29 July, the same day a proponent of using renewable energy to replace nuclear following the Fukushima disaster was defeated in a local election. The protesters, including old-age pensioners, pressed up against a wall of steel thrown up around the parliament building shouting, “We don’t need nuclear power” and other slogans. On the main avenue leading to the assembly, the crowd broke through the barriers and spilled onto the streets, forcing the police to bring in reinforcements and deploy armoured buses to buttress the main parliament gate. The protest came as results from rural Yamaguchi showed that Tetsunari Iida, an advocate of renewable energy to replace nuclear power, lost his bid to become governor to a rival backed by the opposition Liberal Democratic Party (LDP), which promoted nuclear power during its decades in power, Kyodo news agency reported, citing exit polls. Iida, who wants Japan to exit nuclear power by 2020, had promised to revitalise Yamaguchi’s economy with renewable energy projects and opposed a project by Chubu Electric Power Co to build a new nuclear plant in the town of Kaminoseki. Energy policy has become a major headache for Prime Minister Yoshihiko Noda, who less than a year in office is battling to hold his Democratic Party together before a general election due next year but which could come sooner. Weekly protests outside Noda’s office have grown in size in recent months, with ordinary salary workers and mothers with children joining the crowds. (Reuters)

Mongolia

Soldiers from around the world are in Mongolia for the 10th “Khaan Quest” multinational peacekeeping exercise. More than 1,000 soldiers from 12 countries, including Mongolia, India, Germany, Britain, Japan, South Korea, and the US are taking part in the 12-day training exercise.This year’s manoeuvres consist of various courses including battalion level staff exercises, platoon level counter-improvised explosive device training, field training and medical outreach.Sun Xusheng, a military attache with the Chinese Embassy in Mongolia said: From a military point of view, the exercise is only tactical, and on a small scale. I personally think that its significance is more political than military. The first “Khaan Quest” exercise was conducted in 2003 between the US and Mongolia. It has become an annual event since then. This year’s Khaan Quest will end on 24 August. (ITV)

In the vast rolling plains of Salkhit, 45 miles outside the capital of Ulan Bator, a work crew are busy bending large metal cables into an elaborate, squat structure. Once complete, and with a turbine the length of a football field inserted into the top, it will form a key part of the first wind farm to operate in this coal-rich but infrastructure-poor Asian country.Over the next month, 31 wind turbines will go into operation across this isolated site, supplying an impressive 5 percent of the nation’s current power needs. More importantly, those involved are hoping it will kick-start a clean energy revolution in a country in dire need of non-polluting energy sources. (Global Post)

More than 250 Pakistani Hindus have arrived in India over early August bearing tales of religious persecution, according to Indian border officials, fueling perceptions of growing discrimination against minorities in Pakistan. The Pakistani Hindus, who came by road and rail with valid pilgrimage visas from Sindh, Baluchistan and Punjab provinces, have reported incidents of kidnapping, looting and forced religious conversion, the officials said. Pakistan has 2.7 million Hindus in a majority-Muslim population of 180 million. They represent those who chose to stay after the sectarian blood bath that accompanied the 1947 partition of the subcontinent at the end of British rule. (…) India does not have a national refugee law; it deals with arrivals from neighboring countries on an ad hoc basis. Thousands of Pakistani Hindus who have come here in the past two decades have still not received Indian citizenship. But the country may be unable to maintain that detachment for long, in view of the steady stream of Pakistani Hindus who say they are being harassed by new Muslim fundamentalist groups in Pakistan’s Sindh province. (Washington Post)

China’s Defence Minister General Liang Guanglie has expressed his keenness to visit New Delhi this year to cement defence ties with India before the once-in-decade leadership transition gets under way in Beijing, Chinese sources have told The Hindu. General Liang will likely visit New Delhi in September, shortly before the 18th Party Congress — scheduled for October or November — opens in Beijing to finalise the leadership transition when the 71-year-old Minister is set to step aside. His trip will mark the highest-level visit to India from the People’s Liberation Army (PLA) since 2005, when he last visited the Indian capital as the PLA’s Chief of General Staff. The sources said the Indian government responded positively to his proposal and was firming up dates. The PLA’s eagerness to schedule a high-level visit has been seen as a shift in how it handles ties with India. Indian officials have been struck by the recent moves to reach out to India following several years of strained military-to-military relations that even saw defence exchanges suspended in 2010 for more than one year. (The Hindu)

The India-Sri Lanka CEOs Forum will hold its first meeting on 4 August in Colombo, Sri Lanka. The forum, which has been set up to develop a road map for increased cooperation and mutually beneficial economic partnership between the two countries, will deliberate ways and means to enhance trade and investments between the two countries. Top business leaders from India and Sri Lanka will participate in the forum meeting. The forum will also interact with Commerce Minister Anand Sharma and his Sri Lankan counterpart Rishad Bathiudeen. Sunil Bharti Mittal, chairman of Bharti Airtel, will be the Indian co-chair of the forum with Kulathunga Rajpaksa, executive director of Samson International, from Sri Lanka. The bilateral trade between India and Sri Lanka was worth $4 billion in 2010-11 and has the potential to double to $8 billion within the next three years. Sri Lanka is India’s largest trade partner in South Asia, while India is Sri Lanka’s largest trade partner globally. The trade between the two countries grew rapidly particularly after the India-Sri Lanka free trade agreement (FTA) came into force in March 2000. Between 2000-2008, bilateral trade multiplied nearly five-fold. (Daily News)

Myanmar is no stranger to criticism from Western nations and human-rights groups, some of whom still approach the once-reclusive nation with caution despite major economic and social reforms there over the past year. But as the plight of Myanmar’s Rohingya ethnic minority captures global attention, the country is now getting flak from a new quarter – the Muslim world.Since violence between Buddhists and Muslim Rohingyas erupted in Myanmar’s Rakhine state in June, leaving at least 78 dead, governments and rights groups have been critical of Myanmar authorities’ actions, which they say have not afforded enough protections to the minority group. New York-based Human Rights Watch released a 56-page report on 31 July asserting that authorities failed to prevent initial unrest, and that security forces in some cases killed and raped Rohingyas. Myanmar officials have defended their treatment of the group and say they have helped re-establish order and cooperated with international aid organizations to bring relief to the area. The country’s Ministry of Foreign Affairs said in a statement on 1 August that Myanmar “totally rejects the attempts by some quarters to politicize and internationalize this situation as a religious issue,” adding that the incidents of violence in Rakhine State “are neither because of religious oppression nor discrimination.” Either way, some of the most vocal critics in July have come from countries that have in the past been more welcoming to Myanmar than the West, including Indonesia, Egypt, Saudi Arabia, Pakistan and Malaysia. (Wall Street Journal)

The US Congress on 2 August extended a ban on imports from Myanmar, seeking to maintain pressure despite a series of reforms in the country that have prompted an easing of other sanctions. (…) President Barack Obama has eased other restrictions on Myanmar in hopes of encouraging reform. On 11 July, he gave the green light to US companies to invest in Myanmar and partner with its controversial state oil and gas company. Lawmakers said they were also encouraged by recent changes in Myanmar, including the election of opposition leader Aung San Suu Kyi to parliament, but wanted to maintain leverage to press for greater improvements. “By renewing this bill today and keeping the measure on the books even as we are open to new flexibilities, we will help send a strong signal to those in Burma,” Representative Joe Crowley, a member of Obama’s Democratic Party, said on the House floor. Crowley said the measure showed US support for “the immediate release of all political prisoners and prisoners of conscience, an end to violence against all minorities including the Kachin and the Rohingya, and the adoption of genuine democratic reform in Burma.”(…) US businesses have pressed for a greater lifting of restrictions, fearing that they will lose out to competitors from European and Asian nations whose governments do not impose sanctions on Myanmar. (AFP)

Burma’s parliament has appointed the navy chief Admiral Nyan Tun to replace a regime hardliner as one of the country’s two vice presidents. Admiral Tun, 58, has a reputation as a political moderate and his appointment is seen as strengthening government reformers.The house speaker Khin Aung Myint said that the navy chief was selected by the military personnel who make up one quarter of the legislature, and the appointment was approved by an electoral college. The army has the right to choose one of the two vice presidents, but its first candidate, Yangon chief minister Myint Swe, failed to win approval because his son-in-law is an Australian citizen, which disqualified him from becoming a vice president.Admiral Tun gave up his four-year command of the navy to take the oath of office, during which he pledged: “I will carry out my responsibilities honourably to the best of my ability and strive for the further development of the eternal principles of justice, liberty and equality.” He replaces Tin Aung Myint Oo, a renowned hardliner with close links to ex-junta chief Than Shwe, who resigned in July due to ill health. Reuters says the role of the vice-presidents’ has been largely ceremonial, so it is unclear what influence Admiral Tun will have on policy, although he will sit on bodies such as the National Defence and Security Council and the Finance Commission. (ABC)

The first meeting between the head of the Central Intelligence Agency and his new Pakistani counterpart was labeled “substantive, professional and productive” by a senior U.S. official.CIA Director David Petraeus and Inter-Services Intelligence chief Lt. Gen. Zahir ul-Islam met on 2 August at CIA headquarters in suburban Washington in an effort to bring the contentious relationship back on track. (…) The Pakistani government has been reassessing its relationship with Washington after a number of high-profile incidents last year, particularly the U.S. raid on Osama bin Laden’s compound in Abbottabad, of which the Pakistanis had no prior knowledge, and the accidental killing of Paksitani soldiers operating along the Afghanistan border by U.S. airstrikes in November. (…) The senior U.S. official who spoke on the condition of anonymity because of the sensitivity of the discussions would not comment on the specifics of the meeting, but said the discussions between Petraeus and Islam “provided an opportunity to discuss a number of proposals for how we can enhance our joint efforts against terrorism.” The official added, “Both leaders reaffirmed their commitment to work together to counter the terrorist presence in the region that threatens both U.S. and Pakistani national security.” (CNN)

U.S. Defense Secretary Leon Panetta says Pakistan’s military will soon be ready to begin a long-awaited offensive in its North Waziristan border region, where the al-Qaida-affiliated Haqqani network is reportedly based. Military officials in Pakistan have nothing to say about Panetta’s claim, and Pakistan’s political leaders say it would be premature to speculate on whether an operation is being planned. Pakistan has long resisted pressure to mobilize troops against the Haqqani network who are said to be entrenched in North Waziristan. The United States says the militants are involved in cross-border attacks on NATO forces to fuel the Taliban insurgency in Afghanistan. (Voice of America)

Militants Attack Major Pakistan Air Base; 9 killed

Islamist militants armed with rocket-propelled grenades and automatic weapons fought their way into one of Pakistan’s largest air bases on 16 August, the air force said, in a brazen challenge to the nuclear-armed country’s powerful military. Only one aircraft was damaged, said an air force spokesman, adding that the Minhas air base at Kamra, in central Punjab province, did not house nuclear weapons. “No air base is a nuclear air base in Pakistan,” he said. A gunbattle raged for hours after the attack started. Commandos were called in to reinforce and police armored personnel carriers could seen heading into the base. Eight militants and one soldier were killed, the spokesman said. The attackers moved through a nearby village under cover of darkness and climbed a nine foot (2.7 meter) wall strung with barbed wire to break into the base. Some were wearing military uniforms. The assault cast doubts over official assertions that military operations had severely weakened militants waging a violent campaign to topple the U.S.-backed government and impose strict Islamic rule. (Chicago Tribune, Reuters)

With the US rebalancing its strategic focus to Asia-Pacific, a key Obama administration official on 23 July said his nation’s ties with India will play a key part in its future strategy and, accordingly, it wants to “knock down” any bureaucratic barriers in defence relations and “strip away” impediments. (…) Carter, who was only recently appointed by US Defense Secretary Leon Panetta as the point person for US-India defence trade, said India is “an economic power with an increasing military capability” and that its leadership in civil discourse and democracy is critical to the political stability of South Asia. (…) Noting that India-US military-to-military engagement has increased steadily over the years, to include a robust set of dialogues, exercises, defence trade, and research cooperation, the US official said the shared challenge in the next era would be to find concrete areas to step up defence cooperation, “so that only imagination and strategic logic, and not administrative barriers, set the pace”. To a query on India not appoint its counterpart to him, Carter said he was not concerned about the mechanism, but only about results. (Daily News)

Politicians should treat India’s economic growth as a national security issue, Indian Prime Minister Manmohan Singh said on 15 August, warning a lack of consensus is holding back Asia’s third-largest economy as it tries to drag millions from poverty.(…) Singh did not give details, but some analysts warn of social unrest if India’s fails to meet growing aspirations. The 79-year-old economist credited with liberalizing India’s economy in the 1990s has been blocked by allies from implementing more free market reforms. India remains one of the world’s fastest growing large economies despite a sharp slowdown over the past year, but economists say it needs to expand even faster to create jobs for millions of people who will reach working age in the next few years. (Reuters)

Large troop deployments appear to have stemmed an outburst of ethnic violence in northeast India, officials said on 26 July of clashes that left at least 45 people dead. Authorities in the state of Assam were drawing up plans for some 200,000 displaced villagers, who fled their homes for protection in relief camps, to be escorted back under armed guard. Rival gangs from indigenous Bodo tribes and Muslim settlers have fought each other since 20 July, often beating victims to death with sticks and burning down scores of houses in an eruption of anger over long-running land disputes. “The situation is returning to normal and we are taking all possible steps to ensure that no fresh outbreak of clashes takes place,” Assam chief minister Tarun Gogoi told AFP. (Daily Times)

Sri Lanka’s efforts to narrow its trade deficit and contain inflation will place the island on a platform for faster economic growth, Ajith Nivard Cabraal, governor of the Central Bank of Sri Lanka, said today. Cabraal spoke in an interview with Bloomberg Television after the central bank held interest rates for a fourth month. On the decision to keep benchmark interest rates on hold: “We are keeping these rates unchanged because we have seen very clearly that the measures that we have put in place in February and March are working in the way that we have wanted it to work, so therefore we don’t see any reason to make any changes right now and we will be quite comfortable with the results so far and we will stay on the same course as we have already started now.” (…) “The exact sums have not been worked out as yet but we have agreed between the two parties that we would be going into what is known as Extended Funds Facility, that’s about the main consensus that we have reached so far. But beyond that there will be details that will obviously have to be worked out but we will do that towards the end of September when the next submission is due. But our own view is that we don’t need to have a standby arrangement any longer because we are comfortably placed with our reserves right now. But having the IMF with us in the current global conditions will be a bonus and we will certainly want to work out a methodology to have them with us over the next couple of years.” (Bloomberg)

Alternatively heralded as freedom fighters and decried as terrorists, the LTTE fought a 26-year war for Tamil independence against a majority-Sinhalese national government. Three years after the national Army defeated the LTTE in a 2009 offensive that left 40,000 civilians dead, military camps still mark the landscape in the predominantly Tamil north. The Sinhalese-controlled government justifies the militarization by citing national security concerns.“When you’ve lived under terrorism for 30 years, you’re going to take precautions,” says Malinda Seneviratne, the editor in chief of The Nation, a weekly English newspaper in Sri Lanka.But many Tamil civilians worry that the increased security is a cover to exert control over the Tamil minority. It’s a claim that, if true, could signal a return to the state-sponsored discrimination that led to war in the first place.“Given the ethnic divide in Sri Lanka, there is a perception amongst people that the military are there to restrict the rights of the people of the region,” says Paikiasothy Saravanamuttu, the director of the Centre for Policy Alternatives in Colombo. “There is no chance of violence anytime soon. But if people come out in peaceful protest and violence is used against the population, then the likelihood of the population itself becoming more militant is greater.” (Christian Science Monitor)

Human rights activists in Sri Lanka say the government must seek UN help in investigating serious violence in jails which has resulted in the deaths of two Tamil prisoners. The second inmate died on 8 August after more than a month in a coma. Activists blame the deaths on the government. But officials deny responsibility.(…) Civil rights activists say the inmates were then assaulted by prison authorities both before and after their transfers to other jails.(…) A group of 28 human rights activists have now issued a statement blaming the government for his death, which they say was caused by torture. (…) They call on the government to appoint an inquiry commission under the control of the UN’s Office of the High Commissioner for Human Rights. (…) Media coverage of the episodes has highlighted Sri Lanka’s ethnic faultlines.Sinhala-language media have tended to describe the prisoners as “terrorists”, while Tamil-language outlets have termed them “political prisoners”. (BBC)

Nepal’s opposition parties kept their pressure on the government demanding the resignation of the country’s prime minister. They blocked parts of Kathmandu around the government buildings and many officials were not able to reach their offices because of the protest. Hundreds of supporters of opposition political parties have gathered outside the main government offices in Nepal’s capital to demand Prime Minister Baburam Bhattarai step down. The protesters on 10 August blocked the area around the complex in the heart of Katmandu that houses the prime minister’s office and the main government offices, chanting slogans against Bhattarai. Government officials were not able to reach their offices because of the protest. Riot police kept close watch on the protesters, but there were no reports of violence. Bhattarai has been running a caretaker government since May, but the opposition parties want a new government with representation from all the major political parties to conduct elections scheduled for later this year. (Daily News)

Government officials in Nepal have announced that, from September, it will be compulsory for all tourists who want to trek in the country, to be accompanied by at least one government registered porter or guide.

Trekkers travelling in groups are already required to do so, but previously solo adventurers were permitted to explore the mountains alone. The new rule is likely to come into force next month, in September. The decision was taken by the Ministry of Home Affairs and has been welcomed by the Trekking Agencies Association of Nepal (TAAN), which says it will help to ensure the safety of tourists and the control of illegal trekking businesses. It follows the death of 23-year-old Belgian Debbie Maveau, whose decapitated body was found on 14 June beneath a hiking trail in the Langtang National Park, near the Tibetan border. This incident followed a number of other assaults and disappearances including that of an American, Aubrey Sacco, who went missing in 2010. (Telegraph)

Nepal has banned women under the age of 30 from working in Persian Gulf nations amid increasing concerns over abuse and exploitation. Nepalese women are among thousands of Asians who travel to the Middle East in search of employment. They often arrive willingly, but subsequently face conditions that the U.S. State Department says is indicative of forced labor — the withholding of passports, restrictions on movement, nonpayment of wages for work up to 20 hours a day, threats, deprivation of food and sleep, and physical or sexual abuse. The age bar is aimed at preventing some of the abuse, Raj Kishore Yadav, Nepal’s minister of information and communication, said on 9 August. He said the hope is that the risks are lower with more mature women. The Nepalese government says 58,000 Nepalese women are working in these Gulf states — Saudi Arabia, Kuwait, Bahrain, Qatar, United Arab Emirates and Oman. However, human rights agencies estimate that number at about 200,000, saying that the official figure does not take into account all those who have traveled illegally, many through India. Nepal had imposed a complete ban on women working in the Gulf states after the suicide of a domestic worker, but lifted those restrictions in 2010. (CNN)

The United States is urging Bangladesh to allow international humanitarian groups to continue providing aid to ethnic Rohingya refugees who have fled deadly sectarian violence in neighboring Burma. On 2 August, Bangladesh ordered three NGOs to stop their activities in the southeastern district of Cox’s Bazar. Officials said the move was meant to discourage more people from crossing the border from Burma. The U.S. State Department said late on 7 August it is “deeply concerned” about Bangladesh’s intent to shut down the groups, which include Doctors Without Borders, Action Against Hunger and Muslim Aid. Sectarian violence between Buddhists and Rohingya Muslims in Burma’s western Rakhine state has left dozens dead since June. Many Rohingya, who are considered illegal immigrants in Burma, have attempted to flee into Bangladesh.But the Rohingya are also denied citizenship in Bangladesh, which argues the group has been living in Burma for centuries. Bangladesh has also angered rights groups by turning away boats carrying scores of Rohingya. (Voice of America)

India on 24 July assured Bangladesh that it will ratify the land boundary agreement after forging a consensus as Dhaka agreed to allow New Delhi more time to complete internal consultations to sign the stalled Teesta pact. Imparting a renewed momentum to bilateral ties, Foreign Secretary Ranjan Mathai held wide-ranging discussions with his Bangladesh counterpart Mohamed Mijarul Quayes. “The two diplomats held talks in cordial and constructive atmosphere,” Syed Akbaruddin, the spokesperson of the external affairs ministry, said here after the talks. Matai and Quayes had comprehensive discussions on a range of issues, including cooperation in political and security-related matters, border management, counter-terrorism, power, connectivity and trade and investment, he added. The two foreign secretaries also decided to fast-track a host of bilateral projects being implemented under $1 billion line of credit given to Bangladesh nearly two years ago. At the meeting, the Bangladesh side raised the issue of the stalled pact on Teesta water-sharing which could not be signed last year because of fierce opposition by United Progressive Alliance constituent Trinamool Congress. “From the discussions I have had so far, the sense I get is that India is serious to sign the agreement sooner than later,” Quayes told reporters to queries about the fate of the Teesta accord. (Daily News)

Nobel laureate Muhammad Yunus says Bangladesh’s latest move to expand the power of the government-appointed chairman at the pioneering Grameen Bank he founded could hurt the millions of poor borrowers who own 97 percent of the lender. Government spokesman Musharraf Hossain Bhuiyan said a proposed law change approved on 2 August by Prime Minister Sheikh Hasina’s Cabinet would allow the bank’s chairman to appoint its managing director. That authority is now held by the bank’s board of directors, who are mostly Yunus supporters.Yunus and the Bangladeshi government have been at odds for several years over the running of Grameen Bank, which pioneered giving small loans to the very poor. A government-appointed investigation found that Grameen Bank violated its charter as a microlender by creating affiliates that did not benefit the bank’s shareholders, and recommended the government merge those businesses with the bank. Yunus maintains those businesses are independent and should remain so.(…) “I am very disheartened to see that the poor people are being deprived of the ownership of the bank,” he said. “I had always apprehended this. Now my apprehension is going to be a reality.” “The government’s decision will destroy the bank of the poor and the country’s bank of pride,” he said. (Washington Post, Associated Press)

15 August should be a time for sighs of relief and back slapping in Australia’s parliament. After almost a year of political stalemate on asylum seekers, federal politicians have agreed to send those who try to reach Australia by boat to Nauru and Papua New Guinea. The vote passed the house of representatives today and is expected to pass the Senate on 16 August. But despite prime minister Julia Gillard declaring that “this house has risen above the politics of this issue and taken clear action to save lives,” many Australians feel deflated and a bit embarrassed by their parliament. Australia has seen “unauthorised boat arrivals” sky rocket in recent months. So far this year, more than 7,900 people have arrived in Australian waters. This compares to about 4,500 people for the whole of 2011. It also compares to the handful of boats that arrived after former prime minister John Howard’s government instituted tough border protection measures in 2001 – including “offshore processing” (measures Labor took great pleasure in dismantling after it won office in 2007). More worrying has been the number of people who have died when their boats failed to make the journey from Indonesia to Australia. (Guardian)

Australia’s decision to re-establish diplomatic ties with Fiji’s military government has been criticized by human rights campaigners. They argue Australia and New Zealand are acting prematurely to restore links to Fiji’s army rulers, who seized power in a bloodless coup in the South Pacific island nation in 2006. Fiji has had a fractious relationship with its South Pacific neighbors since the military overthrew an elected government almost six years ago.(…) However, formal ties now are to be re-established and travel restrictions on Fijian government members eased.Thawing relations. The thawing of relations follows Fiji’s commitment to hold elections in 2014 and promises of a new constitution, which have convinced Australia and New Zealand that real steps towards restoring democracy are being taken after so many difficult years.(…) But critics insist Fijian authorities continue to muzzle the press and stifle freedom of speech and assembly, while locking up dissidents. (…)But Australia’s former foreign minister Alexander Downer says political realities often mean that unpalatable relationships must be pursued. (Voice of America)

THE US fears Australia’s credibility as a military ally is at risk because of the big spending cuts announced in the federal budget. US officials have raised their concern privately with Australian counterparts at multiple levels in recently in Washington and in Canberra. The cuts announced by the Gillard government in May would reduce Australia’s defence budget from the equivalent of 1.8 per cent of GDP last year to 1.56 per cent. This is the smallest since 1938, the eve of World War II, the Australian Strategic Policy Institute said. The US is also cutting its defence spending, but this year will nonetheless spend the equivalent of 3.5 per cent of GDP. Concern has been registered by the Obama administration, and a former top official of the Bush administration has accused Australia of seeking a “free ride” on the US, marking it as a bipartisan complaint about the cuts to Australian defence. “Australia’s defence budget is inadequate,” said Richard Armitage, deputy secretary of state in the Bush administration.” It’s about Australia’s ability to work as an ally of the US. I would say you’ve got to look at 2 per cent of GDP,” which implies an extra $6 billion in spending annually. Planned spending is $24 billion this year. (Sydney Morning Herald)

Australia on 2 August rejected a proposal by a Washington-based think tank to base a nuclear aircraft carrier strike group on Australia’s west coast as part of a shift of U.S. military might to the Asia-Pacific region. A Pentagon-commissioned report by the Center for Strategic and International Studies on repositioning U.S. forces in the region suggested relocating an aircraft carrier from the U.S. East Coast to an Australian naval base south of the city of Perth.But Defense Minister Stephen Smith said on 2 August that while negotiations were under way to increase U.S. navy access to Australia’s Indian Ocean base, HMAS Stirling, it would never become a U.S. military base.”We have made it crystal clear from the first moment — we don’t have United States military bases in Australia. We don’t see the need for that,” Smith told Australian Broadcasting Corp. television. (Bloomberg Businessweek, Associated Press)

What price a Tiger? At Harry’s, a well-known hang-out in a strip of bars on Singapore’s Boat Quay, the answer is S$15 ($12) – about double what drinkers pay in London. That is a nasty surprise if you are new to Singapore. But this frothy price is less shocking if you consider the valuations being placed on the maker of Tiger beer, Asia Pacific Breweries, as a bid battle for the business moves into its final stages. (…) Such groups are also eyeing opportunities that could come from the creation by 2015 of a common market by the 10-member Association of South-east Asian Nations, although stubborn non-tariff barriers may threaten that target date.(…) What is particularly striking in Malaysia is how the overseas muscle-flexing by its large corporates is being propelled in part by cash-rich pension funds that are not even household names yet in Asia itself. (Foreign Times)

Before the recent Phnom Penh meeting, the South China Sea issue was brought up and included in joint communiqués of previous ASEAN ministerial meetings.(…) Cambodia rejected the requirement by the Philippines and Vietnam to safeguard ASEAN unity. If ASEAN issued a communiqué siding with some individual member states over sovereignty issues and acted as a judge over the South China Sea issue, this would mean the whole organization positioning itself against China.(…) When we have a COC, not only China, but all claimants should abide by it. Over the past decade, it was not China that broke the DOC and went straight to occupy disputed areas. (…) Also, bilateral negotiations between claimants must be insisted on. The intervention of any third party will only further complicate the issue.(…) This doesn’t mean we should stop negotiations, but that we should prioritize strengthening ASEAN-China relations in other areas so as to build an atmosphere of mutual trust and enhance the chance of cooperation. (Global Times)

The Committees of Foreign Affairs of the National Assemblies of Cambodia, Laos and Viet Nam held its fourth conference in the central province of Nghe An on 2 August to promote friendship, cooperation and development of the border areas of the three countries. The conference took as its theme “the role of parliaments in supporting the Development Triangle.” It took place in the special context of the Viet Nam-Cambodia Friendship Year 2012 and the Viet Nam-Laos Friendship and Solidarity Year 2012.The three countries have hosted an array of activities to mark the 45th anniversary of the establishment of Vietnamese-Cambodian diplomatic ties and the 50th anniversary of the establishment of Vietnamese-Laos diplomatic ties and 35 years since the signing of the Viet Nam-Laos Friendship and Cooperation Treaty. At the event, Vietnamese NA Vice Chairman Uong Chu Luu underscored the significant role of each NA in assisting the ‘Development Triangle Area’. Luu proposed the NAs and their external relations committees actively back agreements relating to the Development Triangle Area signed by the three governments and supervise the implementation of the agreements. He said this conference should consider the possibility for the establishment of the Cambodia-Laos-Viet Nam Inter-Parliamentary Committee and the committee’s plan of action to supervise and assist the implementation of policies and agreements to ensure effective results. “(Vietnam News)

“Before, people came to this area to study English but now it’s Chinese,” said Gua Fa, a teacher and manager of the Ming Fa Chinese School. (…)It’s another sign of China’s growing influence in Cambodia, something that is upsetting the unity of the 10-member Association of Southeast Asian Nations (Asean). China has a good standing in impoverished Laos and Myanmar as well, Asean members along with Cambodia, much to the chagrin of others in the bloc such as Vietnam and the Philippines, which are at loggerheads with Beijing over a territorial dispute in the South China Sea. Singapore, Brunei, Indonesia, Malaysia and Thailand make up the rest of the grouping. As cash-strapped and underdeveloped Cambodia increasingly turns to Beijing, the group is worried about being held hostage by China’s economic power over its poorest members. “While China’s loans and infrastructure projects have benefited the region, there has been growing resentment,” said Bonnie Glaser, a senior fellow at Washington’s Center for Strategic and International Studies (CSIS). “There are also worries of excessive dependence on China as well as fears of increased vulnerability to economic pressure.” Of Asean’s three poorer members, Cambodia appears to be the most under Beijing’s sway. (The Jakarta Globe)

For the first time since the end of the Vietnam War, the United States will start to clean up the herbicide Agent Orange used to defoliate forests during that guerrilla conflict. The cleanup, which begins on 9 August at the former US military base of Da Nang, is a step forward in the ethics of modern warfare. It sets a precedent for how former foes can reconcile by taking responsibility for a war’s aftereffects on health and the environment. It also points to the need for the US to make sure it doesn’t leave any ecodisasters in Iraq and Afghanistan – such as open burn pits – when leaving the military bases in those war zones.In Vietnam, the US plans to spend $49 million to clean up several “hot spots” where the chemical dioxin in Agent Orange remains a health hazard by seeping into soils and watersheds. Between 1962 and 1971, the American military dumped about 20 million gallons of herbicides on jungles and mangroves to expose communist fighters. The area exposed is estimated to be the size of Massachusetts. In the initial cleanup, millions of tons of soil will be removed to get rid of the toxin. Private donors are being sought to help pay for what may eventually be a $450 million price tag for helping Vietnam end the problem. (Christian Science Monitor)

Tensions rise after Beijing declares city, which Vietnam lays claim to, its newest municipality. (…) From government offices to the streets of Vietnam, tensions between Beijing and Hanoi have mounted in July over what China calls the South China Sea and Vietnam the East Sea, an area where vast deposits of oil and gas, important international shipping routes and fishing rights are of interest not just to Beijing and Hanoi, but also to the Philippines, Malaysia, Taiwan and Brunei. But July’s protesters had only China on their mind. After detaining a group of Vietnamese fishermen near disputed islands this year, Beijing announced that the state-backed China National Offshore Oil Corporation was seeking bids for oil exploration in what Vietnam deems its own sovereign waters. (…) Carlyle Thayer, a Vietnam expert at the Australian defence academy, said Vietnam was likely to maintain its sovereignty by co-operating – but not aligning itself – with the US, but warned the situation in the South China Sea could worsen before it improved. “Most likely an incident will occur from a misadventure of two opposite boats trying to be in the same place at the same time,” he said. (…) Protesters are not just angry about China’s territorial ambitions, but about the gaping rich-poor divide, increasing accounts of police brutality, widening crackdowns on dissent, and growing numbers of land evictions and human rights abuses. (Guardian)

The Ministry of Defense announced on 11 August that military personnel and police would not be allowed to participate in 2014 elections because Indonesia’s political infrastructure was still too fragile to allow armed officers to participate in politics. Defense ministry spokesman Brig. Gen. Hartind Asrin told the Jakarta Globe on 11 August that with the current level of democratic maturity, it is still too risky for military and police personnel to vote or be nominated in elections. “If we went to the polls now, the country would fall apart immediately,” he said, adding that there could be a civil war if military and police troops came to blows over different political views. The military consists of about 400,000 soldiers supported by some 60,000 civil servants. Meanwhile, the police force consists of 408,000 officers supported by some 30,000 civil servants, Hartind said. (Jakarta Globe)

China and Indonesia have started talks on the local production of C-705 anti-ship missiles, as part of Indonesia’s efforts to achieve independence in weapons production. The initial talks were conducted as part of the first China-Indonesia defense industry cooperation meeting held in Jakarta on Wednesday, July 25, 2012.According to sources in Indonesia, a seaside site for the production plant and open sea testing has already been located. The Indonesian Navy already received C-705 missiles and has recently conducted a successful firing test in the Sunda Strait. Indonesia is currently negotiating three levels of cooperation – local assembly of C-705 missiles from kit supplied from China, partial production of kit elements in Indonesia and collaborative research and development regarding future missile programs.Indonesia and China have tightened their military cooperation in recent months, culminating in the recent “Sharp Knife” joint Special Forces exercise in China, involving Chinese and Indonesian special forces. China has also invited ten Indonesian Air Force pilots to train using a Sukhoi fighter flight simulator in China. (Defense Update)

East Timor is ready to maintain stability on its own without the hundreds of international peacekeepers who have stayed in Asia’s newest country a decade after it declared formal independence, the United Nation’s chief said on 15 August.(…) The visit comes after the U.N. Security Council praised the country of 1.1 million people for holding peaceful presidential elections. Protests after July’s parliamentary elections resulted in violence that left one dead. But Asia’s poorest country is now planning for the last of nearly 1,300 international peacekeepers to leave by year’s end.” Timor-Leste does not need U.N. peacekeeping operations at this time,” Ban said in the capital, Dili. “The National Police of Timor-Leste have strengthened their capacity. They have successfully helped the three rounds of parliamentary and presidential elections.” He added that the United Nations would stay in East Timor in other capacities. (Atlanta Journal Constitution, Associate Press)

East Timor’s president swore in the nation’s new coalition cabinet on 8 August, announcing three additional ministerial posts that the opposition has dubbed an “unnecessary” use of the poor nation’s money. President Taur Matan Ruak announced 16 ministers, three more than the former government. Six are from Prime Minister Xanana Gusmao’s National Congress for Timorese Reconstruction (CNRT), which leads the coalition government after winning the general election in July. (…) Fernando “Lasama” de Araujo, president of the minority Democratic Party (PD) that joined the coalition after the CNRT failed to win an absolute majority, will be deputy prime minister and minister for social welfare. Jose Luis Guterres of minority Frente-Mudanca, another ally, was appointed foreign affairs minister. The size of the new cabinet, with three additional ministerial posts, drew criticism, especially from the ranks of the opposition Fretilin Party, which came second to the CNRT in the July legislative elections. (Daily Times)

Malaysia’s economic expansion unexpectedly accelerated as construction and consumption climbed, easing pressure on the central bank to join its Asian counterparts in cutting interest rates to shore up growth.

Gross domestic product rose 5.4 percent in the three months through June from a year earlier, after expanding a revised 4.9 percent in the previous quarter, Bank Negara Malaysia said in a statement in Kuala Lumpur on 14 August. (…) Prime Minister Najib Razak’s increased spending ahead of a general election that must be called by early 2013 has bolstered Southeast Asia’s third-largest economy, allowing the central bank to keep rates unchanged for more than a year.(…)“Malaysia is in a sweet spot at the moment,” said Lim Su Sian, an economist at HSBC Holdings Plc in Singapore. “While it’s inevitable we will see the global weakness start to filter through and investment might lose some of its momentum, there’s a lot of underlying support from the government and economic transformation programs. This strong number cements our view there won’t be a rate change this year.” (Bloomberg Businessweek)

Malaysian Prime Minister Najib Razak says he will review changes to a law critics say restricts free speech online, after protests.His comments came after activists and bloggers staged an online black-out for one day to protest against changes.They replaced their home pages with black screens critical of the Evidence Act, which was revised in April. Critics say the law makes people unfairly liable for content published from networks and personal devices.”I have asked Cabinet to discuss section 114A of the Evidence Act 1950. Whatever we do, we must put people first,” the PM said in a post on his Twitter account. Officials deny the change is meant to silence critics ahead of an election. (BBC)

The captain of a merchant ship bound for Singapore changed course for Australia on 13 August for fear that desperate asylum seekers he had rescued in Indonesian waters would attack his crew, an official said on 16 August. Home Affairs Minister Jason Clare said the 67 would-be refugees could be deported to tent camps in the Pacific countries of Nauru or Papua New Guinea under new laws due to be passed by the Senate on 16 August, aimed at deterring growing numbers of asylum seekers from attempting to make the dangerous journey to Australia by boat. But the opposition has called for the asylum seekers to be charged with piracy for using threats to divert the 870-foot (265-meter) ship. The asylum seekers were still near the main Indonesian island of Java in a crowded fishing boat headed for the Australian territory of Christmas Island, 250 miles (400 kilometers) to the south, when they made a distress call to Australian rescue authorities early on 13 August, Clare said. (Fox, Associated Press)

Yet another wealth report has put tiny Singapore on the top of its charts – this time, as the wealthiest nation in the world by GDP per capita, beating out Norway, the U.S., Hong Kong and Switzerland.The report, released by Knight Frank and Citi Private Wealth, estimates that Singapore’s GDP per capita – at US$56,532 in 2010, measured by purchasing power parity – is the highest in the world, topping Norway (US$51, 226), the US (US$45, 511) and Hong Kong (US$45, 301). The report also predicts that Singapore will hold its place as the world’s most affluent country in 2050 (by GDP per capita), followed closely by Hong Kong, Taiwan and South Korea who will displace Norway and Switzerland as the world’s richest places.This figure is no doubt bolstered by the staggering number of millionaires in the city-state, which Knight Frank and Citi Private Wealth predict will only keep growing. (Wall Street Journal)

At least 19 people have died in severe floods in the Philippine capital, Manila, and nearby areas. More than 80,000 people are being looked after in emergency shelters, with torrential rain leaving low-lying areas underwater. Rescuers are using rubber boats to reach stranded people, but some have refused to leave amid fears of looting. The flooding – neck-deep in some parts of the city – forced the closure of offices and schools. More than half the amount of rain normally seen in August has fallen in the capital in 24 hours, reports say. In the worst reported incident of casualties, nine members of one family died when a landslide hit shanty houses in Manila’s Quezon City. Others died from drowning and electrocution, according to the country’s disaster response agency. A state of calamity has been issued in at least four areas, it added. Benito Ramos, head of the country’s disaster response agency, said that at least 60% of the city was underwater. (BBC)

Hundreds of troops, backed by assault helicopters, launched offensives on two strongholds of a breakaway Muslim guerrilla group in southern Philippines after they attacked at least 14 military camps and outposts, officials said on 9 August. The brazen attacks since 5 August left at least four soldiers dead including one who was beheaded, while at least two rebels were killed in the counteroffensive, according to the government. But a regional army spokesman, Col. Prudencio Asto, said the rebel death toll had reached 15 by 9 August, citing intelligence reports. (…) The rebel group broke off last year from the larger Moro Islamic Liberation Front, which is involved in peace talks with the government. Known as the Bangsamoro Islamic Freedom Movement, it opposes the negotiations, and has vowed to continue fighting for an independent homeland for minority Muslims in the south of the predominantly Roman Catholic nation. Governor Mujiv Hataman said the military and police have strengthened security in public areas in a five-province Muslim region that he heads to prevent diversionary attacks like bombings from Kato’s fighters. (Washington Post, Associate Press)

Guam

In what is perhaps a validation of the assessment made by the Center for Strategic and International Studies, Yomiuri Shimbun stated that the Japanese and American governments are considering military facilities on Tinian and Guam. As part of enhancing deterrent to crises, Yomiuri Shimbun reports that “also being considered is the preparation of military facilities in Guam and Tinian, part of the Northern Mariana Islands, to be shared by the SDF [Self Defense Forces] and U.S. forces, and conducting landing drills and other exercises. We believe such activities will be useful in boosting the defense of remote islands in (…) “The two countries are planning to base their surveillance activities in Guam and utilize the U.S. military’s Global Hawk unmanned reconnaissance planes. These steps are expected to help the two countries share information before the outbreak of various incidents, and consider and discuss how to jointly deal with such events as situations develop,” said Yomiuri Shimbun. (Marianas Variety)

Deputy Defense Secretary Ashton B. Carter said after his meetings with Guamanian and military leaders over 18-20 July, he is more convinced than ever that Guam has a central role to play in the strategic rebalance to the Asia-Pacific region. (…) “The insights I was able to gather during this visit [to Guam] reinforce the department’s optimism that our plan is achievable and in line with our strategic priority of maintaining security and stability in the Asia-Pacific region,” Carter said.A senior defense official traveling with the deputy secretary told American Forces Press Service on background that during the Guam visit Carter wanted to convey to Guamanian leaders his optimism that the planned Marine Corps relocation from Okinawa “is in a much better place than it was even six months ago.” The processes involved in implementing the plan, including coordination with the Japanese government and Congressional authorization, “all seem to be coming together,” the official said. (American Forces Press Service)

Commonwealth of the Northern Marina Islands

The attorney general of the Commonwealth of the Northern Mariana Islands allegedly has fled his own district to avoid prosecution for alleged government corruption, a CNMI prosecutor said.CNMI Attorney General Ed Buckingham didn’t appear in court to answer to criminal charges on 6 August, and a judge in the commonwealth court has issued a warrant for his arrest, said attorney George L. Hasselback. Hasselback, who filed criminal charges against Buckingham on 3 August, said he is almost certain the attorney general has left the commonwealth.”Right now, as it stands, there’s a $50,000 bench warrant out against the still sitting AG of the CNMI,” Hasselback said.Hasselback is the legal counsel for the CNMI Office of the Public Auditor, which is allowed by CNMI law to investigate the governor or attorney general of the commonwealth. Buckingham is accused of spending government money on a campaign party held at the governor’s house in 2010, Hasselback said. (Guampdn)

Benigno R. Fitial and former attorney general Edward Buckingham are being criticized for keeping under wraps yet another “sole-source” contract. The 25-year agreement with Saipan Development LLC is among the most expensive government contracts in CNMI history. (…) Some lawmakers, including Senate President Paul Manglona (Ind-Rota), Sen. Juan Ayuyu (Ind-Rota), and Rep. Frank Dela Cruz (R-Saipan), separately said on 15 August they will be asking the Office of the Public Auditor to investigate the contract award.(…) “I would do everything I can to block this contract from being fully executed at least until all the details are scrutinized. You are talking about a 25-year obligation by the government and it’s going to be the CNMI people paying for it,” Dela Cruz said.Fitial placed CUC under a state of emergency, placing CUC under his direct control.The 41-page power purchase agreement grants Saipan Development LLC an “exclusive right to develop a diesel-generated electric power plant” on Saipan. (Saipan Tribune)

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